WSJ Spins Another Yarn Of Clearwire HypeMAX

from the move-along-nothing-to-see-here dept

Intel's massive $600 million investment in Clearwire is already paying off big in terms of friendly PR. The Wall Street Journal is the latest publication to weigh in with a puff piece on the company, bizarrely claiming that taking $600 million in VC is the perfect way for the company and its early investors to cash out. This story is hung on the belief that it's not a good time for telecom IPOs, based on Vonage's poor offering and that of some unknown e-commerce software vendor, and that Clearwire was just avoiding an adverse market.

While things may be pretty cool on the IPO front, blaming the market for Vonage's weak offering as well as Clearwire's decision to go another route to raise funds ignores the fact that neither of these offerings really looked particularly attractive. You wouldn't know it from the WSJ article, but Clearwire's S-1 raised a lot of questions about the company, none of which have really been answered -- or now need to be answered, since it will remain private for the time being. The only hint of discussion of the company's financials, beyond an acknowledgement it's already got more than $600 million in debt, comes in a throwaway last paragraph, where the reporter notes Clearwire pulled in just $33 million in 2005. Of course, a little more research would have revealed that $25 million of that was from equipment sales -- from the unit Clearwire sold to Motorola at the time of the Intel investment. So despite the media's anointing Craig McCaw as a golden boy -- conveniently forgetting the massive flameouts of XO and Teledesic -- plenty of questions still hang over Clearwire and WiMAX. While there's a dire need for new broadband providers to introduce more competition into the marketplace, it's still awfully early to say Clearwire's a success, and Intel's investment is no proof. HomeRF, anyone?

Latency

The biggest problem with wireless solutions is the latency. WiMAX has great potential. Great range, and theoretical speeds are pretty impressive. Intel is working on mobile WiMAX which will make it more viable of a cell replacement.

Anyway, it has promise. It still is young and unproven...so give it credit for being just that.

The thing that makes it most attractive is the low cost of deployment. You could blanket small urban/suburban areas for much less than cellular...and you would certainly be a lot cheaper than getting wires (copper or fiber) to everyones door. If anything it has the potenital of lowering the entry barrier in a stagnent broadband market.

a little off topic

with the stuff intel et al have been trying to do in third world countries with thin-ish cilents and mesh networks, it makes one wonder why no startups have tried that approach here...

it seems with a few well-placed fast-piped network node centers, a mesh, or ad-hoc type of network could work very well in a major metro area... and with the almost minimal technology overhead (no wires, no APs, just the node hardware) the only issue is reliability.

*shrug* just another way the big giants are "failing to innovate" right?

No Mobile Carriers = No Wimax

There is no business model for wimax in economies with developed infrastrastructure (US, cananda, Western Europe, Japan, korea) unless it is deployed by a mobile carrier or it is used an extension to an EXISTING fixed-line operator's infrastructure to cover dark spots.

This is why intel is focusing on moblity and nations with developing economies.

Here is the problem. None of those opportunities command sufficient volumes to produce the kinds of scale intel seeks. So intel offers to put it laptops. Well the PC vendors don't want this and it won't work anyway because there is no infrastructure to use.

But here is the real kicker. Mobile carriers will upgrade their networks to true all IP, broadband 4G-type of networks around 2010. Whatever they deploy will have economies of scale and it will be deployed by carriers with towers, backhaul, swtiching offices, billing centers and ....and customers.

Now if wimax misses that ship, its over because those networks will offer very good "fixed" performance and cheaper prices than Intel's wimax so they will replace WiMAX for most fixed applications that its seems headed for today.

Can WiMAX become the next mobile platform. They've got a shot but i wouldn't put money on it. Mobile wimax tests have, thus far, shown that mobile wimax technology has a long road ahead of it and in the meantime UMTS LTE, FLASH-OFDM, and others are moving in for the wimax kill.

Hyped marketing slogans work on consumers but not so well on the RF engineers that manage and plan moble networks. Intel's got nothing yet other than hot air and that is not enough for this market. That could change but Intel's going to need to put money into legitimate engineering. Marketing hyperbole will not do it here intel.

Re: No Mobile Carriers = No Wimax

You make some great points. I think WiMax has a huge uphill battle to gain any momentum in the wireless access arena. The existing mobile wireless giants (Verizon, Cingular, Sprint, etc.) will upgrade to 4G networks and maintain their dominance.

Urban deployments of WiMax are hard pressed to make a business case work. The only fit currently is for rural areas (which is what Clearwire is focusing on presently). The future of WiMax looks shaky from my point of view.